“It’s been an extremely difficult and painful last month,” Yelp cofounder-CEO Jeremy Stoppelman told employees in an internal memo. “The physical distancing measures and shelter-in-place orders, while critical to flatten the curve, have dealt a devastating blow to the local businesses core to our mission.”
Citing in internal data, Stoppelman said interest in restaurants has dropped 64% since March 10, while its nightlife category fell by 81%. Likewise, gyms and similar businesses are down 73%, while salons and other beauty businesses are down 83%.
“The duration and impact of this is unknown, but it will have a direct impact on our own revenues,” Stoppelman said.
Leading up to the layoffs, Stoppelman said Yelp pursued other cost-cutting measures, including reducing a number of nonemployee expenses. “We have reduced server costs, deprioritized dozens of projects, and redone our budget based on ensuring company survival (instead of growth),” he said.
Additionally, the public company has cut executive salaries by as much as 30%.
For his part, Stoppelman said he is not taking a salary and has sworn not to vest any of his 2020 stock awards for the remainder of the year.
Yet, despite those various measures, Stoppelman said he sees rough times ahead for Yelp.
“With revenue levels expected to be substantially lower, Yelp must make these severe cost reductions to sustain itself as a business,” he said.
Most employees on furlough will be put on unpaid leave, but are expected to retain the bulk of their benefits during that time, as well as receiving two weeks of additional pay.
Those who have their hours reduced will also continue to retain their benefits, Stoppelman said.
Yelp reported nearly 6,000 employees at the end of last year.